“This post originally appeared on OPEN Forum, an online community providing small business owners with information and advice to help them do more business.”

Effective leaders know that no important business decision is made in a vacuum. Critical decisions that affect the well-being of your company call for extra thought and consideration, and for the small-business owner, this task is a vital one because it affects your future and that of your employees.

Such decisions require that leaders ask specific questions of themselves and others, says Roxi Hewertson, CEO of Highland Consulting Group Inc. and AskRoxi.com. “Not asking pertinent questions or gathering critical information is an incredibly myopic way to make a decision,” Hewertson says.

For more than 20 years, Hewertson has worked with business owners, helping them more effectively lead. She says that failure to make good decisions is a common problem.

“Leaders often wait too long and then make a unilateral decision in a reactive versus proactive way. What happens in business is chaos occurs where order is needed, and a lack of trust develops due to the unpredictability of ‘What's coming next?’ and ‘Who's on first?’ syndromes.”

You can increase the odds that you’ll make more effective decisions by first asking yourself these five questions.

1. What is the decision that needs to be made? “Be explicit,” Hewertson says. “What exactly needs to be decided? If you can articulate it, you know what the decision is, but if you can’t, you don’t—so begin with a lot of clarity.”

If, for instance, you know you need to decrease expenses in order to remain profitable and a decision regarding this issue is necessary, it’s important to know exactly what that decision is. Does it mean you need to downsize staff? Institute a hiring freeze? Cut employee benefits? Narrowing down the decision you need to make enables you to make a sound one.

2. Whose decision is it? It’s critical that you know and communicate up front exactly who will make the decision, Hewertson says. “Are you the decision maker?," she asks. "Or is this a group decision that you will not override? Do you want input or a decision from others? Or is the decision someone else’s outside your group?

"People don’t usually mind what the answer is, but they do mind a lot if you pretend it’s something it’s not," Hewertson says, "as would be the case if you've already made the decision and are pretending it’s still up for discussion.”

For employees to become invested in whatever decision you make, it’s important that they feel respected and consulted, agrees Deborah C. Hoard, president of PhotoSynthesis Productions, an award-winning, small, independent video and film production house in upstate New York. “Being perfectly clear on who the decision makers are is crucial,” Hoard says.

Knowing who the decision makers are also makes it clear which method you should choose, such as consensus, majority or unanimous.

3. How will the decision affect the corporate culture? Early in the decision-making process, Hoard asks herself how a potential decision will affect the quality of life in the workplace. “We strive to make this a fun place where everyone enjoys coming to work,” she says. “If we’re being offered a lucrative job but the team wouldn't want to come to work if we took on the project, then that is going to affect our decision.”

4. When will the decision be made? The timeline for the decision is important for people to know, so the impacts of the decision can be managed well and people can get on with their work, Hewertson says. “Taking too long or not long enough can be frustrating and create unintended and even dysfunctional outcomes.”

While you don’t want to rush a decision, you also want to avoid taking too long or failing to make a decision at all, Hoard adds. “Indecision is a decision in itself," she says, "and the eventual outcome probably won’t be one you would have made if you were being decisive.”

5. How and to whom will the decision be communicated? The success of a decision depends on how well it is communicated, Hewertson says. “Consider who needs to know, who the messenger is, and how it will be shared and through what means, such as in person, by email or over the loudspeaker,” she says. "Often the choice of messenger sends a message all its own. The message will feel very different to the receivers depending on who sends it.”

Whatever decision you end up making, don’t be surprised if you second-guess yourself. “You’ll never know for sure if you’re making the right decision,” Hoard says. “You can only do the best you can with the information you have on hand.”

Photo: iStockphoto

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